Friday, March 30, 2007

Perhaps the greatest compliment one can pay an insurance agent (or any salesperson, really) is the referral: telling your friends, co-workers or relatives what a great job your agent has done for you. If there's anything that tops this, it might be when one agent refers a case to another, as if to say "hey, this guy may do an even better job for you than I can."

It's quite heady, really, to be the recipient of such largesse, and I am pleased when this happens to (for?) me.

Most of the time.

Recently, a fellow agent (who I've had in some of my CE classes over the years) had a difficult situation: a small group client, with whom he'd had a cordial and mutually beneficial relationship for many years, retired due to medical problems, and her daughter took over the family business. The daughter, a middle-aged woman whose primary employment is as a paralegal, and the agent butted heads, and they both agreed that a new agent would be just the ticket. Al [ed: not his real name] called me, and asked if I'd be interested in taking on the case. He gave me a little background, filled me in on the clients' current situation, and offered to do the introductions. I was flattered to be asked, and happy to take on a new client with a minimum of effort.

Or so I thought.

Briefly, this client had been with the same carrier for many years, and had for the past few been on a generic co-pay plan ($500 deductible, $20 office visits, prescription card; you know the drill). At the last renewal, Al and the client had agreed to change to a High Deductible Health Plan coupled with a Health Reimbursement Arrangement (HRA). Simple enough, right?

Well, no.

I met with the client this morning. Well, eventually. We had set a 9:30 appointment, and I arrived promptly, meeting with her second-in-command, an affable fellow who seemed genuinely interested in discussing what it was they wanted to accomplish. I explained some of the facts of (insurance) life to him, and made some suggestions. By 10:00, the new boss (we'll call her Elphaba) hadn't arrived, and I needed to confirm something with the carrier. So, I whipped out the old cell-phone, and called to ask a few questions. While I was thus engaged, in she breezed. I quickly rang off, and introductions were made. I asked a few questions, and she told me that she wanted her new plan set up in certain ways.

I should have known.

For one thing, this is a small company with some 15 employees, only 3 of whom were on the plan. All insurance carriers have participation requirements that dictate what percentage of employees must be covered; some are more stringent about enforcing these than others. Fortunately, the carrier here was one of the former. Still, they have certain rules and requirements. For example, she's just hired two new employees, and wishes to subsidize their premiums at a different (lower) level than those already on the plan. This can be accomplished by using classes, but the company has to be notified of such things. She argued, rather forcefully, that it was none of their business, and that she's not required to put anything of the sort in writing.

Did I mention that she's been a paralegal for over 30 years? Well, she mentioned it (more than once), as if this would magically induce the carrier to waive its requirements. I pointed out to her (nicely!) that her employment history, while certainly admirable, was irrelevant. She didn't seem to care for that.

She also wanted to self-administer the HRA. I explained that this was not a good idea: for one thing, was she familiar enough with HIPAA and Privacy Act requirements to handle such an endeavor? For another, the carrier itself offered a free such service, which included necessary plan documentation. That service might not have been flexible enough to meet all of her requirements, but certainly that would be a better choice than going it alone.

And she wanted to fund the HRA itself differently, based on when these new employees "came on board." When I explained that this is, to use industry jargon, a "no-no," she huffily explained that she was paying for the plan, and she could do anything she wanted. I agreed that, as American citizens, we are indeed free to do pretty much what we want, but doing illegal things generates consequences. She didn't like that one bit.

Can't say I blame her.

At that point, it was clear that we weren't going to be doing business together (I have enough stress dealing with recalcitrant carriers, I hardly need the additional aggravation of a stubborn, and yet clueless, client).

After I left, I called Al to thank him again for the referral, but to inform him that I wasn't going to be taking over that case after all. He sighed (more in resignation, I think, than surprise), and apologized for the apparent waste of my time. I told him firmly that he owed me no such apology: there was no way to know ahead of time that this would be the result. Elphaba and I might well have hit it off, and things might have been fine. That we didn't was no fault of his.

No, not mine, but the health care and health insurance industries'. Part of the transparency efforts we champion so often here at IB has to do with pricing: how much does this procedure cost? What's the price of that MRI? Is the generic really the best deal?

One problem consumers have is that there's a basic disconnect in how much they are charged for a given service as opposed to how much the insurance company allows, and how much they actually pay. Anyone who's seen an EOB (Explanation of Benefits) form knows that what the provider initially charge has little to do with how much they ultimately collect (from the insured and the carrier).

We've talked about various insurers' programs before: Aetna's initial pilot program in Cincinnati, Blue Cross of Minnesota's HealthCare Facts efforts come immediately to mind. A new survey by PNC Financial Services Group found that there is widespread support for such information:

They surveyed 1,000 consumers, as well as 150 hospital executives and 50 health insurance company executives. Granted, this isn't a huge sample, but it certainly indicates a growing trend that both industries are going to have to address, apparently sooner rather than later.

On the one hand, there's been precious little evidence that consumers are clamoring for this in great numbers: we seem to be more interested in our own out-of-pocket than the total cost of services received. Still, well over half of the consumers in that survey indicated that knowing how much a given procedure or treatment would cost would affect their ultimate buying decision.

And it is a buying decision: we purchase health care, not simply receive it.

And hear this, Medicare administrators and health insurance exec's: almost 8 in 10 of those consumers would like to see a break-out of how much of each bill goes to administrative costs as opposed to clinical care.

Thursday, March 29, 2007

For our first two years, I made the conscious decision not to accept advertising. For one thing, we didn't really need it; IB isn't designed to be a profit center [ed: obviously!]. For another, I wanted to decisively avoid even the appearance of a conflict of interest. We tend to skewer pretty much every party to the insurance contract -- carriers, providers, insureds and agents -- and I wanted to make certain that those efforts wouldn't be compromised.

So why now?

Again, a pair of reasons: one, I'd really like to upgrade some of our tools (SiteMeter, etc), and perhaps move to a non-Blogger platform. The second is that Home Town Quotes is a lead generation program for agents (not necessarily us, BTW) but not affiliated with any one carrier or product, thus avoiding the conflict of interest dilemna.

Thank you to all of our readers, whom I respect and appreciate more than words can say.

This is important for a number of reasons, not the least of which is that it would lend some powerful cred to the claimants' cause. If the Congress of the United States has a stake in the outcome (as it would if the legislation passes), then this will be a powerful tool for those who are fighting to see justice done.

The problem is that the insurers, perhaps justifiably, require death certificates in order to approve the claims. Yet much like those who perished in the World Trade Center tragedy, producing such paperwork is problematic. It's not like those who ran the death camps took the time to fill out death certificates so that families could someday collect on life insurance policies.

There's a potential problem here that may make passage of the bill difficult: such legislation would conflict with the President's primacy in handling foreign policy. We're already seeing Congress grappling with the issue vis Iraq, and members may be reluctant to wage a similar battle for such a small constituency.

Still, the cause is just, so it will be interesting to watch how this plays out.

According to a new study published by the Kaiser Family Foundation, uninsured folks seem to receive less health care than those with insurance. The study goes on to say that those without insurance suffer worse outcomes than insured folks.

Why would this surprise anyone?

If anything, this is an indictment of the medical field: why are providers short-changing their patients? Isn't everyone entitled to the very best care?

Well, no:

Folks with no (or poor) credit must pay higher interest rates than those with excellent credit. In fact, many auto and home insurance carriers charge folks with poor credit higher premiums. Does this mean that folks with no or poor credit can't rent an apartment? No, of course not. And they can insure it, as well. They'll pay more, and get less. But that's how the system works.

Am I unsympathetic to the uninsured? Not really, but the the problem with studies like this one is that they do a poor job of educating the public because they misrepresent the issues.

For one thing, they treat the uninsured as a static population; it is not. Folks constantly move in and out of this demographic. So many people who were uninsured last year are insured this year, and vice-versa. Doesn't mean they won't get care, or that their lives are forever ruined. For the relatively few hard-core uninsured, there are a myriad of government programs to help them. But, as Mike's pointed out, that same system has done a poor job of taking care of them.

One sentence in that release stood out for me: "the uninsured were more likely to report not fully recovering and no longer being treated following an accident and roughly seven months after the initial health shock." Whose fault is that? I don't know, and I suspect that the authors were none to interested in following that up (or if they were, the answers may not have supported some inferences). There are clinics and other facilities available to pretty much everyone (at little or no cost), but there's no law that forces folks to follow up with their own care.

It appears that one egg was fertilized by two sperm cells, resulting in twins that are neither identical nor fraternal.

Or maybe both?

Interestingly, there don't seem to be any IVF issues at play here; they were apparently conceived "the old-fashioned way." There are some health issues: one has abnormal genitalia. On the other hand, they seem to be developing normally.

Tuesday, March 27, 2007

Making the headlines this past week was the announcement by the Edwards' family that Elizabeth's cancer had returned. Then today we get word that Tony Snow's cancer has also returned.

Two high profile, public figures.

Two chances to educate the rest of us on two very serious illnesses.

The Edwards' appear to be protected by their wealth, if not insurance as well. Mr. Snow may (or may not) be as well off financially, but he is surely covered by the health plan available to government employees.

But will they get equal treatment by their providers?

At least one person speculates there may be reason for the Edward's to be handled much differently than Tony Snow.

John Edwards made his reputation and his fortune by vilifying physicians when crap happened, and convincing juries through questionable science, an aggressive expansion of malpractice territory, and powerful courtroom theater that someone was at fault.

Will this be held against him?

After entering political life, Edwards spun his human-suffering profiteering into a noble fight for the "little guy." That's a false opposition if ever there was one. Here's how his campaign website puts it:

"For the next 20 years, John dedicated his career to representing families and children just like the families he grew up with in Robbins. Standing up against the powerful insurance industry and their armies of lawyers, John helped these families through the darkest moments of their lives to overcome tremendous challenges. His passionate advocacy for people like the folks who worked in the mill with his father earned him respect and recognition across the country."

Or will his "new" image over-shadow his past, almost legendary fights against the medical establishment?

You can't expect Edwards to be clairvoyant. Nonetheless, it is without question that he has contributed to the current climate in which doctors are perceived as greedy bumblers, insensitive to the consequences of their actions, and who would continue to leave their physical and emotional wreckage but for the legal recourse that malpractice litigation offers.

Will he encounter doctors out for retribution?

John Edwards wants the best cancer care for his wife. Yet in the relentless pursuit of malpractice awards, he has helped create an environment where there is probably less of the best going around today, and where there will certainly be less of it in the future.

There is no way to predict how these situations (Edwards & Snow) will play out but one has to wonder just how many docs are willing to aggressively treat the wife of someone who single-handedly built a fortune by tearing down the profession he is trusting to treat his wife.

"We can only imagine that the Board is considering an HDHP exemption inresponse to criticism that health plans recently approved by the Connectorare still unaffordable for many," wrote Carmen Balber, consumer advocatewith the nonprofit, nonpartisan Foundation for Taxpayer and Consumer Rights(FTCR), in a letter to the board implementing the Massachusetts law.

One reason SCHIP is in trouble is because it has allowed states to provide taxpayer-subsidized health care for adults and middle-income families, even when poor children go without coverage. For instance:

In 2005, 87 percent of Minnesota's SCHIP enrollees were adults, as were 66 percent of those enrolled in Wisconsin's program. In Arizona -- which has one of the highest rates of uninsured children in the nation -- 56 percent of those enrolled in SCHIP were adults.

Oh, that reason. Is there more?

In addition, SCHIP funds are often used to insure children who are not in low-income families, says Turner:

In New Jersey, for example, Schip covers children whose parents earn up to three-and-a-half times the poverty line -- an amount that exceeds $72,000 a year. Sen. Hillary Clinton and Rep. John Dingell recently announced their own bill that would subsidize coverage for kids in families earning up to four times the poverty level -- or nearly $83,000 for a family of four.

I can't imagine such waste. After all, they are only spending the GOVERNMENT'S MONEY.

Dr Stuart Henochowicz, who blogs at Medviews, hosts a jam-packed edition of Grand Rounds. He's included over 3 dozen posts arranged into 3 helpful categories. My only quibble is that everything is kinda jammed together, so it's a bit of a challenge getting through.

The New York Times has a disturbing piece on the travails of those who've purchased Long Term Care insurance (LTCi), especially from Conseco. It's a look at the "dark underbelly" of the biz, and it's not flattering.

It's not necessarily all that helpful, either.

It starts with the sad story of Mary Rose Derks, a 65 year old widow who bought such a plan some 17 years ago. Over the years, she (and her family) have spent tens of thousands of dollars on premiums, only to have claim after claim denied. On the face of it, this is unconscionable, but perhaps there's more to the story than what the Gray Lady has deigned to share with us.

For one thing, Conseco has long had an industry reputation as, um, problematic. They got into this line with obviously underpriced products, and have had numerous rate increases over the years as a result. Contrast that with industry leaders like UNUM, Hancock and Genworth, all of which have relatively quiet rate histories, and substantially fewer claims issues.

What's the difference?

It goes unremarked in the NYT article, but there's one entity which fails to make an appearance in all 3,000 words: where's the agent?

This is an important, if egregious, omission for a number of reasons. First and foremost, the agent is the first-line defense against unscrupulous claims practices. How so? Simple: we're advocates for the insured. Independent agents, especially, fulfill that role, because we work for the client (we represent the carrier - a vast difference). It's our job to make sure that the carriers we represent have solid reputations (and yes, that's not a fool-proof guarantee against problems, but it's certainly insurance against them), and to dissuade our clients from looking at price alone.

That, by the way, is the most likely culprit here: again, the Newspaper of Record fails to enlighten us, but it's a sure bet that many (most?) of these folks bought on (low) price alone. That doesn't, of course, absolve the carriers from their responsibility, but it certainly must be a factor.

No doubt some of our commenters will take me to task for all the assumptions I've made here. To which I offer the following affirmative defense: if the NYT had done the full job, and not left so many critical questions unanswered, we'd know for sure, wouldn't we?

Last week I received a call from an old client. He has been paying for his son’s health insurance policy and wanted to cancel it. It seems that the son had gone in for his annual checkup and, with a $1500 deductible, the policy didn’t pay for all the lab tests.

A bit of background…This family was uninsured and had virtually no assets when their teenage son almost died from Leukemia. Medi-Cal (a.k.a. the taxpayers) picked up the tab for his treatment. He fully recovered, but needed to have periodic exams to make sure that it had not recurred. When the Dad contacted me, I found out that he had a small business. With California’s guaranteed issue rules, this meant that he was eligible to set up a group policy. I set one up and the family moved off the dole.

Four years later, the business went under. Since COBRA wasn’t an option and the son certainly wasn’t insurable, he took out a HIPAA policy. Premiums were around $230 per month for a $1500 deductible plan, Rx coverage, and $35 doctor office co-pays. No annual maximum and a $5 million lifetime maximum. Altogether not a bad policy.

It’s now been three years since the HIPAA policy was issued and the Dad wants to cancel it. Not only didn’t it pay for the lab tests (It did sharply discount them.), the family’s now into “herbal medicine”. Herbal Medicine? That’ll help big time if the leukemia returns. Luckily, he’s probably again eligible for Medi-Cal.Besides telling him that he’s an idiot, what would you do?

An editorial comment: This illustrates why the "high deductible" solution, as proposed here in California, won't solve our health insurance crisis. Health insurance simply isn't perceived as insurance. It's evaluated with a mental cost / benefit calculation and if the cost is greater than the benefit, many people make the (entirely rational) decision to not buy it. Medi-Cal limits the downside. Now, if that didn't exist, and the cost of a recurrence of the Leukemia was charitable care or a probable death, do you think he would be dropping the policy?

Please excuse my French. It's the start of a famous quote: The more things change, the more they stay the same.

Or, as Yogi Berra once observed: It's deja vu all over again.

Our readers may recall that not so long ago, Anthem and a local group of providers had a falling out, with predictably (at least by us) problematic results. Claims went unpaid, or reimbursed at drastically reduced levels, checks were cut to insureds instead of providers, there were daily diatribes in the local press (some pro-Anthem, others pro-Premier).

Maybe there's something in the southwest Ohio air (or water), but it appears that an eerily similar brouhaha is shaping up in the Cincinnati market. There, the big player is the Cincinnati Health Alliance, comprising some 8 hospital networks and who knows how many physicians. Reading the press is weird: it sounds like a rerun of the Anthem-Premier grudge-match. The carrier claims that the Alliance's demands are out of reason, while the providers aver that Anthem is playing hard ball with their patients' care.

Sound familiar?

Fortunately, I have access to top secret materials (not really: these are flyers sent out by the providers, pleading their case) that may shed some light on the matter.

For Anthem's part, they claim that the Alliance is already overpaid, and that meeting their new demands would be unfair to premium payors and other providers.

The chances of surviving a serious car wreck in Metro Atlanta are about to decrease, according to DeKalb County’s Chief of Fire and Rescue.

Chief David Foster told 11Alive News on Thursday he is “stunned” that DeKalb Medical Center is about to drop out of Georgia’s trauma-care hospital network-- hospitals that are tasked with treating some of the most life-threatening emergencies such as car wreck injuries and gunshot wounds.

ER's make up a small percentage of the patient load in every hospital. Since a large number of the cases that land in ER are uninsured, that translates into a gaping wound where dollars flow out in care and very little returns in paid receipts.

Add to that the number of docs who are not on staff but bill separately for their services. Some report collecting as little as 50 cents on the dollar.

Foster said that his crews have been transporting about 800 trauma patients a year to DeKalb Medical Center, but after DMC drops out, “We can have additional ambulances on the street, but I can’t make the trauma center closer than it is today. So it’s going to affect our patient outcome.”

How many lives will be lost? How many outcomes will be compromised due to this closing?

A hospital spokesman emailed an unsigned statement to 11Alive News that said that the number of victims coming to DeKalb Medical Center for trauma care amounts to less than one percent of the hospital’s 110,000 ER patients every year. So the hospital decided to stop offering expensive trauma care and focus, instead, on where the greater patient demand is – treatment for illnesses and diseases such as cancer and heart disease. The ER will remain open.

Trauma patients represent less than 1% of the patient load, but the dollars spent on care is money that is mostly lost.

800 trauma patients out of 110,000 is a small number, unless you are one of the 800. Since some are not paying their share of the cost of the trauma care, that level of care will no longer be available.

The Georgia Legislature is trying to come up with millions of more dollars to expand the state trauma network to 25 or 30 hospitals, by making trauma care more affordable, creating financial incentives for hospitals such as DeKalb Medical Center and Piedmont, Northside, Wellstar and St. Joseph’s to be part of the trauma-care network.

Funding proposals have included additional fines for traffic offenses, especially those that cause traffic wrecks and injuries, since wrecks account for most trauma injuries, more than gunshots and stabbings.

That's a novel approach.

Increase the fines for speeding, reckless driving & DUI to cover the cost of trauma care.

In the March 5 Register, state Sen. Jack Hatch began an important conversation about fixing our broken health-care system. However, he failed to identify the true reform that is needed in this state.

How so?

Health insurance provides support to individuals and families to cover health care. As we talk health-care reform, we must assure coverage is seamless, accessible and portable, that costs are equitably distributed and that risk pools do not discriminate against the sick or poor.

Health insurance, health care. At least someone got it right.

But what about the last comment? How does one assure that "risk pools do not discriminate against the sick or the poor"?

Risk pools are all about the sick. The only ones who use it are the sick. Can't say I have ever heard of a risk pool for the poor . . . other than taxpayer funded plans like Medicaid.

Health care is a basic human right, not a choice. It is important that we provide access to quality health care that is affordable and reliable for all Iowans.

A basic right. Is personal responsibility part of the equation?

And part II is here:

The way to fix our health-care system is to stop trying to make insurance the solution, and focus instead on getting people the health care they need.

Focus on health CARE. So far so good.

Absent a national approach, states have begun experimenting with initiatives that encourage more employer coverage, require individuals to purchase private policies, and expand public programs. These initiatives cannot succeed because they are based on a failed model: the same insurance system that got us into trouble in the first place.

Here is where she jumps the track.

How did insurance "get us in to trouble"? How is a nationalized system going to cure what is wrong?

First, insurance is temporary. Whether for a home, a car, fine art, or "health," insurance contracts are written for a brief, defined period - a year or less

Really?

Guess some of the clients I have with the same plan for up to 10 years didn't know this.

If you have a private policy, and you cost your company too much or otherwise look undesirable at the end of that period, you'll either pay a lot more or you'll lose coverage altogether.

Where does this garbage come from? Carriers are prohibited from discriminating against one who has high claims. They cannot cancel for any reason other than non-payment of premium. You cannot be singled out for a rate increase.

Second, insurance is based on minimizing risk and maximizing profit - concepts incompatible with protecting the health of individuals and the public at large

More fantasy. This has been addressed before in this forum.

We have a model for this in the United States, and though it might be imperfect, it's a great start. It's called Medicare

Someone needs to inform this lady how poorly Medicare works.

And now for the third segment on health care vs. health insurance . . .

Our existing health-care system is on life support. It's too complicated and too expensive even for those who have health insurance

Too expensive for those with health insurance. Read on . . .

Half of all the bankruptcies in the United States are caused by medical debt. What is surprising is that in the majority of those medical-related bankruptcies, the individuals actually had health insurance.

The rest of the story . . .

The average amount of unpaid debt is . . . about $13,000.

Who goes bankrupt over $13,000?

Apparently quite a few. At least that was the case prior to the change in bankruptcy laws.

Many folks with health insurance have high deductibles and policy exclusions. This discourages them from getting the preventative care they need.

Well, why not? We've had Stupid Carrier and Stupid Client tricks, and now we have a new category.

So what brings this on?

One of my groups, which has been a client for almost 20 years, recently agreed with me that they should change from their generic co-pay plan to a high deductible plan coupled with an HRA (Health Reimbursement Arrangement). The primary benefits of this move were two-fold: the employer saved a great deal on the premium (one of those unfortunately-rare cases where the price differential was substantial), and could afford to generously fund the reimbursement account.

Regular IB readers know that we almost always redact the names of carriers when we discuss them. This is not so much for purposes of liability as it is that most carriers do stupid things, so that it is not really useful to identify which one in any given scenario. But what happened in this instance was so egregious that I feel compelled to actually name the entity involved.

The carrier we're using in this case owns an HRA administrative company, called Definity. Their offer is simple and attractive: if you write your case with the parent company, Definity will set up and administer your HRA for free. This can be significant: set-up fees alone can run into the hundreds of dollars, and on-going administrative services into the thousands.

Still, it is said that free advice is worth what you pay for it, and so appears to be the case with free HRA administrative services.

Of a Monday, I called the number I had, to get the ball rolling (arrange for paperwork and instructions to be sent to the client). But when I called the number I had been given (by the carrier), the "gentleman" who answered refused to identify either himself or his company. That was odd, so I asked if I had gotten the right number, was this Definity? Instead of answering this reasonably straight-forward question, he asked if I was a "member." Hunh?

So I asked again, had I connected with Definity. He replied that he couldn't tell me that (would he have had to kill me?) unless I confirmed that I was a member. I pointed out that he was being moronic, that all I wanted to know was whether or not I had dialed the correct number, and if this was indeed Definity. He refused to budge, so I asked for his supervisor. I was told that "Dan" was not going to be available to me, and I observed that this was idiotic. The "gentleman" objected to this characterization, and warned me that if I persisted, he would hang up. I replied "Too late!" and disconnected. Redialing the number, I was connected with a different person, who was apparently empowered to divulge the fact that this was, in fact, Definity, but that the number I had been given was for claims, not "sales," and that she couldn't connect me to that one.

At this point, it occurred to me that I had learned something quite valuable: if these folks were this incompetent when I'm trying to get a relatively simple plan set up, I can only imagine how poorly they would have managed the arrangement itself. Thankfully, I was able to save my client from such a fate by referring him to a local admin who charges a reasonable fee for his services. It's true: Definity's plan was free but, at that, it would have been far too expensive for my tastes.

Wednesday, March 21, 2007

According to a new poll, conducted by the Wall Street Journal and Harris Interactive, some 80% of us think it's a good idea to require our employers to give us paid sick days. To add insult to injury, almost as many claim that employers who take a pass on this unofficial tax will end up paying for it anyway.

Perhaps mitigating this entitlement mentality is the finding that about half of the 2,700 respondents understand that such a requirement would have adverse effects on their employers' business. So, there's some hope, after all.

What sparked this whole debate? Well, it seems that (no surprise) San Francisco now requires employers to grant paid sick time to their employees. And, certain members of Congress (who shall remain nameless) are looking to expand this nationally.

This would be in addition to exiting FMLA legislation, and could have some deleterious effects on our competitiveness in the global marketplace. And, of course, it could mean that a lot of Mom-and-Pop shops will find themselves shuttered, forced out of business by even more required benefits.

And this is, indeed, a "benefit:" many of us already have employer-subsidized health insurance, as well as short or long term disability cover. In effect, this kind of law would force employers to self-insure short- (or potentially long-) term disability claims. Since we know from previous excercises that employers don't pay premiums or taxes, such a mandate will lead to higher prices, fewer jobs, or both.

"To spare thousands of insured residents from having to buy expensive upgrades, the letter also urges the Connector Authority to allow plans with no prescription drug coverage to meet minimum standards. It also asks that plans with dollar caps on lifetime coverage be included."

Dollar caps on lifetime coverage? Don’t I get junk mail offering that kind of plan every month or so??

Keep in mind the Massachusetts plan already includes a $2,000 deductible ($4,000 family).

Monday, March 19, 2007

For the first time in more than a decade, the debate over how to provide health care for the uninsured is moving back to center stage in Washington and many state capitals. After languishing as a major issue since President Clinton's health care plan failed in 1994, health reform is back on the agenda — from President Bush's State of the Union speech to stump speeches from presidential candidates.

And you can expect a laundry list of folks who want their story to be told.

Let's look at a few.

When Trenton was born, the family did not have medical insurance. "We took out a loan from the bank," Lela says, "because the hospital wanted a down payment. We paid the rest off a few years after that."

She says the Medicaid program needs to be more flexible to accept families with higher incomes.

Most programs accept applicants up to 200% of the FPL (federal poverty level . . . about $19k for a family of 4). How high do these plans need to go? 300%? 400%?

Where does personal responsibility begin and taxpayer subsidy end?

Kendra Pitts, 28, gets coverage though her job for herself at a cost of $60 a month. But to add her 5-year-old daughter, A'Nya, would cost an additional $300 a month, money Pitts says she doesn't have

I have several clients who insure their children separately, outside of the employer plan. Usually the premium is less than $100 per month. In some cases it is as little as $60.

There is no reason for paying $300/month to insure a child that is usually healthy. Alternatives do exist.

She looked into a private plan for A'Nya, but it was about $150 a month, with a $200 sign-up fee

$200 sign up fee?!!!

How much you want to bet this was not insurance, but a discount plan? I have never seen an INSURED plan with a $200 sign up fee.

For a while I had a policy and was paying $400 a month," says Stewart, who is relatively healthy but takes a thyroid medication and drugs for blood pressure and cholesterol. "I paid them more than they paid back in benefits."

So . . . you should only take out a policy if you believe you will get back more than you pay in? Someone has no clue what insurance is all about.

Cesa says his businesses netted him less than $4,000 in 2005, after he paid his expenses, including the $3,000 in medical bills from his finger injury. He's hoping the numbers for 2006 come in better, but he's certain it will be less than $15,000. There's just no wiggle room to buy insurance, he says.

"What am I supposed to do? Sell my house to pay for insurance for my employees and me?

Seems like there are more issues here than just a lack of health insurance. A net profit of $4,000 for 12 months of work? Perhaps a reality check is in order here.

And of course his answer is . . .

There should be a basic (health insurance) system where coverage is provided for everyone."

How "basic" does one get? Maybe 2 doctor visits per year + immunizations? Is that basic enough?

She pays $200 a month for a "discount card," one of many sold around the country by a variety of companies, which promises discounts on doctors and prescriptions.

Why would anyone pay $200/month for a discount card that can be had for less than $25?

On top of that, she pays about $300 a month for the seven medications she takes and the test strips she needs to monitor her blood sugar levels.

Doesn't sound like there is much of a discount to that card. Wonder how much her meds would cost if she stopped paying the $200 for the overpriced discount card?

"I was trying to set up payment plans, but they (hospitals and doctors) weren't willing to work with the amount of money I was able to send them," she says.

Hospitals are like that. Folks seem to think they can run up a $100k bill and offer to pay the hospital $10 per month and everything will be all right.

Not so.

Some of the uninsured simply choose not to buy coverage.

Quite a few actually. On average, about 40% can afford health insurance and can qualify. They choose to spend their money on other things.

Particularly those who are young and healthy — the very group that insurance companies want to attract — tend to see health insurance as an expense with little payback, rather than a hedge against financial disaster. So they don't buy it.

And guess which group has more accidents than anyone else?

The young & healthy.

About 33% of those ages 19 to 24 are uninsured, and about 27% of those ages 25 to 34 are uninsured, according to a Kaiser analysis of Census Bureau data.

So how much does insurance cost for these folks?

Generally less than $100 per month . . . about the cost of a latte' per day.

One of his co-workers, a man in his 20s, buys insurance on the private market, a move Wurtzbacher says doesn't make much sense.

Let’s play a game. Roll time forward a bit…universal healthcare has arrived and you are now a Regional Head of the Healthcare System. You have an annual budget that you absolutely can’t exceed. The medical expenses for your region have been increasing and this year you’re going to exceed your budget. What do you cut? Medical staff? Drug expenditures? Or do you defer maintenance and maybe cut back on some housecleaning?

Want to see something interesting? Do a search on Google for “Canadian Hospitals filthy.” Then do the same thing for American hospitals filthy” and “NHS filthy.”

The Canadian search produces a stream of articles decrying deplorable conditions in their hospitals. The American search turns up articles on the VA system and, more interestingly, quite a few articles on the England’s National Health Service. At the time I ran the search, no civilian American hospital was mentioned on the first couple of pages of the search results. And the search on NHS produces an appalling number of hits.

According to the articles, both the NHS and the Canadian systems have one thing in common – both systems have cut back on cleaning as a way of saving money. In many cases, the cleaning staff has been replaced by subcontractors…I assume by the lowest bidder willing to agree to the contractual terms. Thing are so bad that, according to one of the articles, one dying patient left money in his will to clean the windows of his ward.

The result has been predictable… the incidence of secondary infections has increased to hundreds of thousands of cases per year. Antibiotic-resistant bacteria are flourishing (click on the findarticles.com link) and killing thousands of people annually. All in all, it sounds like many hospitals are equivalent to what you’d expect in a Dickensian novel.

Take a look at these articles:HereAnd hereAnd hereThe environment that is described is truly disgusting.

Can this happen here?

Absolutely. It’s basic economics…a question of resource allocation. All it will take is the establishment of a centrally managed non-competitive health care system. When budgets are tight and somebody has to decide between purchasing medicine and having an “extra” janitor, guess which one will lose out. The lack of medicine will have an immediate measurable impact. The loss of a janitor? Well, I guess the other ones can just work a bit harder.

You disagree? Need another example? Look inside of one of California’s public school bathrooms. The same principle applies. With no extra money, sanitation isn’t high on the priority list…just ask my kids.

Dartmouth professor Diane Harper actually worked on the study which formed the basis for the vaccine's approval, and notes that it was tested only on women aged 15 to 25. In fact, she believes that it's most helpful for those who are at least 18. It also appears that at least one member of the Centers for Disease Control's advisory committee on immunizations has reported that "while the vaccine may be helpful, it should not be mandatory."

She echoes my concern that we really don't know what the long-term effects of the vaccine will be. I generally try to err on the side of caution, which would initially seem to be "heck, go for the vaccine - after all, where's the harm?" But the risks here are great, and the downside is particularly troublesome.

Thursday, March 15, 2007

Since 1970, health care spending has grown at an average annual rate of 9.8%, or about 2.5 percentage points faster than the economy as measured by the nominal gross domestic product (GDP). Annual spending on health care increased from $75 billion in 1970 to $2.0 trillion in 2005, and is estimated to reach $4 trillion in 2015.

new medical technology may account for about one-half or more of real long-term spending growth.

Half is a substantial number.

“medical technology” can be used to refer to the procedures, equipment, and processes by which medical care is delivered. Examples of changes in technology would include new medical and surgical procedures (e.g., angioplasty, joint replacements), drugs (e.g., biologic agents), medical devices (e.g., CT scanners, implantable defibrillator's), and new support systems (e.g., electronic medical records and transmission of information, telemedicine).2 There is very little in the field of medicine that does not use some type of medical technology and that has not been affected by new technology.

Joint replacement, implantable defibrillator's. Bionic people.

From 1980-2000, the overall mortality rate from heart attack fell by almost half, from 345.2 to 186.0 per 100,000 persons

With heart disease the #1 killer, I doubt anyone would want to go back to the way it was 20 years ago.

Another example of how advances in technology have changed health outcomes over time is in the treatment of pre-term babies, for which very little could be done in 1950. But by 1990, changes in technology, including special ventilators, artificial pulmonary surfactant to help infant lungs develop, neonatal intensive care, and steroids for mother and/or baby, helped decrease mortality to one-third its 1950 level, with an overall increase in life expectancy of about 12 years per low-birthweight baby.4

The cost of treating a premie can easily top $1M. In some cases, the long term effects of treating these children, some of which have serious health issues that they never outgrow, can hit $5M or more over a lifetime.

Many factors influence innovation in medical care. Consumer demand for better health is a prime factor. Research shows that the use of medical care rises with income: as people and the nation become wealthier, they provide a fertile market for new medical innovations. Consumers want medical care that will help them achieve and maintain good health, and advances in medical technology are perceived as ways to promote those goals. Consumer demand is affected by the increased public awareness of medical technology through the media, the Internet, and direct-to-consumer advertising.

These are points that have been addressed in this forum before. We have a demand driven system fueled by seemingly unlimited fund . . . usually from the carriers. A small card in your wallet is like a credit card with a $3M+ line of credit. Doc copays at $20 and the same for Rx, no one pays for their health care any more.

Saying it will help control costs, the state House voted Tuesday to let insurance companies offer stripped-down health plans to individual policyholders.

Stripped down plans lower costs.

Actually, they lower premiums by shifting more of the cost of care away from the carrier and on to the individual.

Not saying this is a bad thing. Just depends on what is being stripped.

He said insurers could still offer full-blown policies which cover all situations. But Adams said some people don't need -- and don't want to pay for -- things like contraceptives, mental health care or chiropractic services.

I am sure this will be challenged by some.

And Rep. Steve Gallardo, D-Phoenix, speculated HB 2757 would make insurance more expensive.

He said premiums will remain the same for less coverage. But those who need what would become options would be forced to pay more for those extras.

Speculated. That's a good word.

Actually, he is probably right. With health care inflation running 12 - 15% it is quite possible that stripping out a few benefits will simply hold premiums at bay for about a year on the stripped down policies, while the rest of the plans continue at a 12%+ clip.

"This bill will provide people with the opportunity to choose between a Cadillac and a Yugo," he said. "And most people are going to want something in between.""

Wonder how the folks at Yugo feel about that?

But again, there is some truth. When given a choice, and an education on health insurance choices, most folks will opt for the plan in the middle.

Voters in Switzerland have rejected plansfor a single means-tested health insurance system, aimed at reducing the high cost of premiums.

Final results showed 71% of voters in a referendum on Sunday opposed the reform.

The voters have spoken.

Under Swiss law, everyone must have a health insurance policy; there are 87 different companies to choose from, each offering a variety of policies.

Mandated health insurance. What a novel idea. Wonder why we don't have that here?

The proposal for a single health insurance scheme came originally from a family rights organisation, and had the backing of the centre-left Social Democrats, Swiss trades unions, and some doctors' associations.

It called for a merger of the existing 87 health insurance companies, and would replace their policies with one premium, calculated on a wealth and income basis.

Single payor proposals backed by Social Democrats & unions. Boy is that a surprise.

Wednesday, March 14, 2007

Sometimes, a carrier can actually contribute something helpful to the on-going debate about health care and health insurance. For example, the Blue Cross Blue Shield Association has published its 2007 Medical Cost Reference Guide.

In it, you'll find some interesting (and enlightening) numbers:

■ In 2006, health care spending in the U.S. reached $2.2 trillion

■ The gummint continues to account for almost half the total costs, mostly through public programs like Medicare and Medicaid

■ Private health insurance accounts for about one-third of the total

■ About 2/3 of us are covered through commercial (private sector) insurance plans, mostly through our employers

Tuesday, March 13, 2007

Bertalan Meskó, blogging at ScienceRoll, hosts this weeks 'Rounds. Built around a Monthy Python theme (NOBODY expects the Monty Python Grand Rounds!), and rife with Python video, this remarkable effort (over 50 posts!) by a 4th year medical student is a lot of fun.

I've been meaning to link this for some time: You may recall our post on Baby Ashley, and especially the blogging efforts of Dream Mom. well, she's collaborated with a neonatal doc to produce a compelling blog mini-series about the travails of a newborn. Recommended.

Voters in Switzerland have rejected plans for a single means-tested health insurance system, aimed at reducing the high cost of premiums. Final results showed 71% of voters in Sunday's referendum opposed the reform.

Under Swiss law, everyone must have a health insurance policy, and there are 87 different companies to choose from, each offering a variety of policies.

Premiums, which take no account of an individual's income, have risen on average by 2.4% annually since 1990.

2.4%? That is amazing.

the Swiss government and centre-right parties opposed the reform plans, saying a single fund would be cumbersome and would not keep the cost of premiums down

So, a single payor system is NOT more efficient?

Do tell.

A recent OECD (Organisation for Economic Co-operation and Development) and World Health Organization report showed that the Swiss spend 11.5% of their gross domestic product on health, compared with an average 8.8% in other OECD countries.

11.5% of GDP? Egads!!

Many people find it difficult to get an insurance company to take them on at all, the BBC's Imogen Foulkes reports from Bern.

Cherry picking in Switzerland? Say it ain't so.

It called for a merger of the existing 87 health insurance companies, and would replace their policies with one premium, calculated on a wealth and income basis.

Redistribution according to wealth. Sound like Socialism.

In recent years proposals to change the way hospitals are run and to promote more generic drugs have also failed.

With a state board poised to approve health care plans for the working poor on Thursday, some are concerned that the high cost of deductibles could keep people away from the doctor's office.

Gov. Deval Patrick and private insurers proudly announced over the weekend that they had met their goal of developing low-cost insurance plans with premiums under $200 a month.

The goal came at a steep cost: deductibles for the proposed plans would run as high as $2,000, including prescription drugs, for an individual to $4,000 for families. That's the amount people would pay in out-of-pocket expenses before their insurance covers their bills for the rest of the year.

Low cost plans = less than $200/month = $2000 deductible.

High cost plans = $380 premium = low deductible & copays.

Today's lesson is in math. How many times can I see the doctor when I am saving $180 per month in premiums?

Regular IB readers may recall our story from last summer, wherein two elderly women bought insurance policies on the lives of homeless (and helpless) men, and then (allegedly) ruthlessly murdered them for the death benefits.

At the time, I was skeptical of the tale, because it seemed so far fetched (even in this day and age). Turns out, though, that truth is stranger than fiction:

Monday, March 12, 2007

Here at IB, one of our pet topics (and interests) is transparency in health care, about which we've written numerous times. Now comes word from Indiana that a group of Hoosier business-folks have glommed onto a new Federal initiative which seeks to offer more information about the quality of care offered by health care providers.

Under the guidance of HHS honcho Mike Leavitt, the US Department of Health and Human Services has launched an on-line project called Value-Driven Health Care (okay, so they're not so creative at names). The project's motto ("Transparency: Better Care Lower Cost") seems to sum up its mission nicely. At the website, consumers can learn about what transparency is all about (well, at least the gummint's take on it), and even find pilot programs that may help them in their search for quality health care with understandable prices.

Indiana Governor Mitch Daniels is a big fan, and recently signed an executive order agreeing to collect information on the quality of care provided to the state's 30,000 employees. The Indiana Health Information Exchange is touted by the HHS as a pilot project to initiate methods of reporting on quality of care. Presumably, this information will become available to the private sector, as well.

I've mentioned before that Transparency has been in its infancy...one supposes that it's now reached toddlerhood.

InsureBlog began life just a little over two years ago, and this marks our 1,000th post. One supposes that it would be appropriate to mention the latest on champagne and insurance, but alas, there seems to be a drought on the subject.

So I'll raise my own flute (metaphorically speaking) to my co-bloggers: Bob Vineyard, Bill Halper and Mike Feehan, and toast them for a job well done.

LIMRA is the Life Insurance Marketing and Reseach Association (on whose Producer Panel I serve, along with thousands of my closest friends). They're kind of an industry-sponsored think-tank and research bureau. In a March 7, 2007 press release, LIMRA announced that the industry was breaking all kinds of production records. Well, not the industry so much as insurance agents.

And while not part of HWR, please check out this article at SoloGig News (a resource for freelancers). Our own Bob Vineyard is interviewed, and shares some tips for entrepreneurs looking for health insurance. Mazel Tov, Bob!

"Governor Deval Patrick yesterday unveiled significantly lower prices." How much lower? Look in the 10th paragraph “average monthly premium for residents of Eastern Massachusetts of $305. That indicates a decrease of nearly 20 percent in premiums from the earlier bids” (why is the good news always buried in the 10th paragraph?)

But averages can cover up a lotta things. For example:

1. The plans are age-rated. The least-expensive plan is offered by Neighborhood Health Plan (a Boston-area Medicaid insurer) and costs $175 a month - provided you are age 35-39. If you are over 56, the premium is $347 a month. Who will actually pay the "average" premium? Anyone?

2. The plans are geographically-rated. "coverage will be less expensive in Central Massachusetts compared with the eastern and western parts of the state."

3. The benefits are bare-bones at the lowest price points, even for the Boston Medicaid insurer. The plan "covers preventive care, office visits, hospitalization, and prescription drugs". Mandates? what mandates? More: "The annual deductible for the basic plan would be steep: $2,000 for an individual and $4,000 for a family" and "Similar plans from the three major health plans". Stripping the benefits sure does lower the premium, but isn’t that a tactic that only the greedy private insurance companies use? Yikes.

The Massachusetts plan is widely called "health care reform" but it looks and sounds to me like plain-old insurance, subsidized by the State. In other words, true to a grand Boston tradition, Gov. Romney "stuck a feather in his cap and called it macaroni". And now Gov Patrick is doing the same.

"An agreement wherein one party financially protects another against an anticipated loss"

Note the word ANTICIPATED. This means something that may happen in the FUTURE.

So what does all this have to do with insurance?

Insurance is an INDEMNIFICATION policy. The contract agrees to INDEMNIFY the insured party should a loss occur in the FUTURE.

Let's see how this works in real life.

Readling, a 50-year-old real estate agent, is one of nearly 47 million Americans with no health insurance.

Let's back up just a moment and see how this happened.

As an independent contractor with a Century 21 real estate brokerage, Readling had bought insurance on her own — a temporary extension of coverage from a prior job.

A temporary extension. Was this COBRA, or was it STM (short term medical)?

The article does not state.

STM's are helpful to bridge a gap when you KNOW you have GUARANTEED coverage coming in a few months. It is not a long term solution.

But she was unable to renew it after she had surgery for breast cancer in 2005.

The cancer probably had nothing to do with the renewal, as many STM's will allow you to reapply but they will not cover any pre-existing conditions. There are a few that will not allow you to reapply if you have made a claim during the prior policy term.

Most insurers would not offer her coverage, she said, and one carrier quoted a price of $2,300 a month for coverage with a deductible of $5,000 a year.

Frankly, I am surprised anyone made an offer. If she had the opportunity to pick up full coverage she should have taken it.

To collect unpaid medical bills, health care providers often obtain judgments against a patient's spouse, as well as the patient, and file liens against their homes.

This is something many folks, even those with the funds & good health, seem to ignore. Without insurance you can still receive treatment but you will still have to pay. The way you pay is with your assets and forfeiting a portion of your wages should your medical creditors decide to pursue garnishment.

She said she had never voluntarily allowed her insurance to lapse and could not understand why she was being refused coverage.

She was refused coverage because she failed to QUALIFY for insurance. As a friend says, you pay for insurance with your dollars but you buy it (qualify for it) with your good health.

The only guaranteed continuity of coverage is from one employer plan to another. Beyond that, about three fourths of the states have a risk pool where someone who is otherwise uninsurable can obtain coverage on a guaranteed basis. All states have HIPAA compliance laws in place that allow someone coming off a group plan to purchase coverage once their COBRA expires.

Barbara Morales Burke, the chief deputy insurance commissioner of North Carolina, said state law did not guarantee the availability of health insurance for everyone. "Most insurers decline to issue policies to those individuals whom they deem to be too risky because of their medical history," Morales Burke said. Blue Cross and Blue Shield of North Carolina will sell to anyone, regardless of the person's medical condition, she added, but the premiums may be very high for people who have had serious illnesses.

So there is an option. In many states Blue is the carrier of last resort, so she is not completely without options.

Working with her doctors, Readling raced to get as many tests as possible before her coverage expired. She recalled her anxiety in the final months: "It's like a freight train coming at you, and it's going to get you. And there was nothing I could do."

Actually, there was.

The permanent coverage needed could have been purchased in advance of the need. That is what an indemnification contract does.

Wednesday, March 07, 2007

Every three weeks, always on a Thursday afternoon, I amble on over to the cancer center for my IV treatment.

(I also take Cytoxan, a chemo drug that comes in pill form, every day, plus a handful of other pills to help deal with the side effects and fringe benefits of being in cancer treatment—anxiety, high blood pressure, occasional depression, insomnia.)

The total bill for each treatment session at the cancer center is something north of $20,000. The annual cost of my cancer care is more than $300,000. That’s three hundred thousand dollars a year.

Almost $30,000 a month to keep me alive.

I have no idea who this lady is. Her story clearly illustrates why health insurance should be a priority for people . . . before they get sick.

As a result of the high cost of Herceptin and Avastin, I am going to hit my lifetime max of $1 million on my health insurance before the end of 2007.

Then what? I can’t even afford a month’s worth of cancer treatment on my own.

Some of the individual plans in GA have $2M caps, while others stop at $3M. Sadly, many group plans, usually those covering public employees, have caps of $1M - $1.5M.

A $2M cap is low by today's standards. A $3M cap should be adequate for most situations, at least for the foreseeable future.